Austria Considers Lowering Working Week To Raise Employment Rates of Older Workers

According to press reports, Austrian SPÖ Labour Minister Rudolf Hundstorfer is in favor of a reduction of the general working hours from 40 to 38.5 per week in order to help keep elderly workers and employees in work longer. In addition, Hundstorfer said that that lowering people’s average working hours could be beneficial to the government’s attempts to increase the average pension age.

Statistics have shown that even though the retirement age for men is 65 in Austria, they are retiring on average at 58.9 years. At the same time, women are retiring on average at age 57.5 years, even though their retirement age is 60. Altogether, Only 42.4% of Austrians aged between 55 and 65 have a job.

The reports are that the SPÖ would create various labor law draft bills and models for the job market of the future. While the Federal Trade Union (ÖGB) announced support for the working week reduction vision, although warning that lowering the working week by 1.5 hours must not mean salary cutbacks, the Economy Chamber (WKO) made clear that it was against a reform.

Sources: Austrian Independent "Hundstorfer ready to reduce working week" (April 18, 2012); FriedlNews "Labor Time: Resistance Against SPÖ´s Plans" (April 17, 2012)

United Kingdom: Study Finds Older Women Doing the Best in Recessionary Job Market

The Chartered Institute of Personnel and Development (CIPD) has released a work audit report finding that older women have fared best as a group in the recession job market in the United Kingdom. The report--"Age, gender and the jobs recession"--states that women aged 50-64, and men and women aged 65 and over, are the only age groups to have registered an increase in both the number in work and employment rates since the start of the jobs recession and have also registered the smallest increases in unemployment.

Specifically, there are 271,000 (8%) more women aged 50-64 in the labour market than at the start of the recession and 200,000 (6.2%) more in work. Over all age groups, there are 387,000 fewer men in work (a net fall of 2.4%) than in the first quarter of 2008, while the number of women in work is only 8,000 (0.05%) lower.

The report also finds that, the older people get, the more likely it is that they will remain out of work for longer when unemployed, although long-term unemployment rates have increased more for younger than older people since the start of the jobs recession.

According to Dr John Philpott, Chief Economic Adviser at the CIPD:

While a combination of population ageing and fewer people wanting to retire early, either for financial reasons or because of a broader desire to prolong their working lives, is boosting the older workforce, it is older women that are getting most of the available jobs. Just why this is happening requires further examination, though with the modern generation of 50 something women more likely to view Madonna than Grandma Grey as a role model, the economically active older woman is well on course to be ever more prominent in British workplaces in the coming years.

However, the relatively good outcome for older women during the recession is no cause for complacency about the need to continually stress the business case for an even more age diverse workforce as the economy starts to recover, especially with so much public policy action understandably focused on cutting youth unemployment. Simplistic talk about older people staying in jobs at the expense of the young must not be allowed to put a brake on progress toward nudging employers to do even better in coping with demographic change. An ageing workforce presents both challenges and opportunities for employers, who at some point in the not too distant future will struggle to fill vacancies unless they recruit and retain older workers, women and men, in even far greater numbers.

Source: Chartered Institute of Personnel and Development Press Release (April 18, 2012)

Australia: Government Proposes $1,000 Bonus for Hiring Workers Over 50

The Australian government has announced that it will budget $10 million for new "Jobs Bonuses" to help tackle age discrimination and encourage businesses to employ older Australian who want to stay in the workforce, among other things providing $10,000 for employers who recruit and retain a mature age job seeker for more than three months. The initiative is part of the "Government Response to the Final Report of the Advisory Panel on the Economic Potential of Senior Australians."

Included in the response to the Advisory Panel report "Turning Grey into Gold" are funds to extend the Corporate Champions program to provide support to employers who wish to promote mature aged employment at their workplace, to extend the Career Advice service by two years to ensure mature age people have access to free, professional career advice, and to promote lifelong learning by expanding education opportunities by adult and community education providers and community organisations to older Australians.

In addition, the government plans to expand the More Help for Mature Age Workers initiative, to now be called the "Investing in Experience - Skills Recognition and Training" program, to allow industries to benefit from improving the skills of their over 50's workforces. To help address age discrimination and stereotyping of older workers, the government will also provide funds to the Age Discrimination Commissioner to address age discrimination, age stereotyping and ageism more generally, and will review Commonwealth legislation to identify age barriers that prevent continued participation in the workforce for people aged 45 years and over.

Source: Deputy Prime Minister and Treasurer Media Release (April 18, 2012)

Reaction: National Seniors Media Release (April 18, 2012); SilverTemp "Employers to get $1000. bonus for hiring older workers" (April 17, 2012)

Video: AARP Inside E-Street Looks at Graying Workforce

AARP's video arm has published a three-part series on Inside E-Street about the graying workforce, including an examination of the silver tsunami, workplace design, and how to recruit and retain older workers.

In "The Silver Tsunami," Inside E-Street looks at the changing U.S. workforce and what it means for employers.

In "Changing the Workplace Environment," Josh Kerst, vice president of Humantech and a certified professional ergonomist, speaks with Inside E-Street about the many physical changes that companies can make to their environment to keep employees not only healthy but also more productive.

In "Recruit, Retain, and Integrate Older Workers," Inside E-Street speaks with Samantha Greenfield, a member of Boston College’s Sloan Center on Aging & Work about the cultural transformation that many workplaces must go through.

Source: AARP Inside E-Street: The Graying Workforce (April 9, 2012)

United Kingdom: Survey of Industry Employers Finds Preference for Older Unemployeds

EAL (Excellence, Achievement & Learning Limited) has released a survey of 500 industry managing directors and those responsible for HR and training finding that they are less likely to recruit school leavers due to the greater availability of more qualified and experienced applicants during the unemployment crisis. Specifically, 48.2% said the availability of older, experienced candidates who are unemployed made them less likely to offer opportunities to school leavers, and in engineering and manufacturing, almost 70% of employers reported a negative impact on opportunities for young people as a result of current trends.

According to EAL, construction and building services were the industries least affected, with around half of respondents reporting their stance towards school leavers as unchanged by the availability of graduate or adult jobseekers.

Ann Watson, Managing Director of EAL, said: “These findings are a stark reminder of the long-term dangers this country faces if the jobs crisis isn’t resolved. The engineering and manufacturing industry, especially, is already facing a real challenge to develop the skilled employees needed for the future, as existing staff approach retirement age."

Source: EAL Press Release (April 10, 2012)

Singapore: Eligibility, Health Insurance Issues Arising under Reemployment Law for Older Workers

Since Singapore's Retirement and Re-employment Act came into effect on January 1, 2012, a number of issues have arisen, according to press reports. Deputy Prime Minister and Manpower Minister Tharman Shanmugaratnam has stated during Parliamentary questions, that 14 dispute cases relating to the reemployment rights of older workers have been presented to the Ministry, and Minister of State for Manpower Tan Chuan-Jin has called on employers to work with insurance companies to ensure that the medical needs of those reemployed are met.

With respect to the dispute cases, Shanmugaratnam said most of the cases were over eligibility for re-employment, but otherwise that implementation has been smooth. He urged employers to refer to the "Tripartite Guidelines on the Re-employment of Older Employees" which provides advice on engaging employees and in making re-employment offers.

With respect to health insurance, Tan said issues are arising with respect to newly re-employed persons more so than older employees continuing to work for their employer. For those affected, hed said that if "an insurance company does not extend the coverage of the scheme up to the age of 65 and also requires re-employed employees to be re-assessed, the employer should work with the insurance company to address this issue so that the medical needs of these employees can continue to be met." In addition:

Industry feedback drawn from various briefing and outreach sessions has shown that companies have already raised the coverage of their group medical insurance schemes for their employees to the age of 65, or beyond. In such cases, re-employed workers would continue to enjoy medical benefits under their company’s medical insurance schemes. By so doing, they would avoid the risk of being denied coverage for existing medical conditions that were previously covered.

Sources: Channel News Asia "Employers to ensure medical needs of older workers are met: Tan Chuan-Jin" (April 9, 2012); Manpower Ministry Parliament Questions and Replies (April 9, 2012)

U.S. Employers Ramping Up, but Still Unprepared, for Boomers Leaving the Workforce

U.S. employers are ramping up skills training and employee benefits aimed at closing skills gaps left when Baby Boomers retire, and at retaining and recruiting older workers, according to poll results released by Society for Human Resource Management (SHRM) and AARP. Nevertheless, many U.S. organizations are largely unprepared for the brain drain and skills void that talented, retiring older workers will leave.

On the positive side, according to the SHRM–AARP Strategic Workforce Planning survey, 72% of human resource professionals polled described the loss of talented older workers to be "a problem" or "a potential problem" for their organizations, and many organizations have taken actions to prepare for the loss of talented older workers who retire, including the following:

• increased training and cross-training (45%;
• developed succession planning (38%);
• hired retired employees as consultants or temporary workers (30%);
• offered flexible work arrangements (27%); and
• designed part-time positions to attract older workers (24%).

On the other side, 71% of those polled still have not conducted a strategic workforce planning assessment to analyze the impact of workers 50 and older who will leave their organizations.

SHRM and AARP have partnered to help U.S. businesses and organizations, and, among other things, AARP offers a free, online Workforce Assessment Tool, providing a snapshot of an organization’s workforce and demographics and analyzes its programs to leverage the talents of its older workers, and the SHRM-AARP Partnership Resource Page includes poll and survey findings, articles, and links to the assessment tool, among others.

Source: Society for Human Resource Management (SHRM) Press Release (April 9, 2012)

Survey: Most Boomers Retired at 65, but Some Keep Working

The MetLife Mature Market Institute reports that the first boomers to reach 65 in the United States--those born in 1946--are "retiring in droves." According to "Transitioning into Retirement: The MetLife Study of Baby Boomers at 65," 45% are completely retired, while another 14% are retired, but working part-time. Of those still working, 37% say they’ll retire in the next year and on average plan to do so by the time they’re 68.

The average retirement age for the 1946 Boomers is 59.7 for men and 57.2 for women. Of those not retired, 61% plan to retire at the same age as they planned one year ago.

With respect to those who are retired, 51% say they retired earlier than they had expected, with 40% of them saying they did so for health reasons. Overall, however, 85% of respondents consider themselves healthy, and 96% of the retirees say they like retirement at least somewhat, with 70% liking it a lot.

Source: MetLife Mature Market Institute Press Release (April 3, 2012)

Canada: Best Employers for Workers over 40

The Globe and Mail has announced its list of Top Employers for Canadians Over 40 for 2012, a group of organizations that are "taking care to keep talent in the house longer with programs and benefits designed for older workers."

The winners--Agriculture Financial Services Corporation, Agrium Inc., BMO Financial Group, Business Development Bank of Canada, Canadian Security Intelligence Service, Dalhousie University, Desjardins Group, EllisDon Corporation, Enbridge Inc., HP Advanced Solutions Inc., Manitoba Hydro, NB Power Holding Corporation, Office of the Auditor General of Canada, SaskTel, and University of Toronto--demonstrated their commitment to older workers through various practics:

stable pensions, particularly defined-benefit programs that have become increasingly rare over the past decade; targeted recruitment of older employees; health plans that extend into retirement with no age limit; opportunities for training and development; flexible working arrangements and time off; recognition of previous experience for vacation entitlements; retirement planning; and phased-in retirement working options and mentorship programs to ensure that skills are passed to younger workers.

At the Top Employers for Canadians Over 40 website, detailed information is provided about each of the employers.

Source: The Globe and Mail (April 3, 2012)

Older Workers More Susceptible to Salary Envy than Younger Workers, Reducing Overall Happiness

According to a research paper presented at the 2012 Royal Economic Society Conference, the bigger salaries of high flying colleagues have been found to harm self-esteem and reduce life satisfaction in workers over 45, while knowing that your colleagues and peers earn more than you can actually raise your satisfaction levels of those under 45.

In "So Far So Good: Age, Sex, Happiness and Relative Income," Felix R. FitzRoy (University of St. Andrews), Michael A. Nolan (University of Hull), Max F. Steinhardt (Hamburg Institute of International Economics), and David Ulph (University of St. Andrews) investigated households in Germany and found, contrary to earlier research, that the generally negative effect that peer group income had on happiness of workers was restricted to older workers, who are usually less mobile and can foresee their lifetime income. Retired people were much less concerned about income comparison, probably because of more urgent aging and health issues.

Going beyond our cross-sectional focus here, these results may perhaps also provide an additional explanation for the observed trends in happiness in industrialized/developed countries. Due to ageing populations, and shrinking shares of young people (who are likely to experience gains in SWB from increasing reference income and economic growth), average happiness is more likely to stagnate.

Source: University of St. Andrews News Release (April 3, 2012)

Study: Preparing Academia for an Aging Workforce

The University of Iowa Center on Aging and the TIAA-CREF Institute have issued a report calling on academic institutions to start making a more concerted effort to engage with and support aging employees as they continue to work well past the traditional retirement age. According to "Promoting Workplace Longevity and Desirable Retirement Pathways within Academic Institutions," less than 5% of the 187 academic institution HR officials surveyed identified issues pertaining to aging faculty and staff as a top institutional priority, even though financial obligations to these employees constitute the largest growing part of university budgets.

Brian Kaskie, Ph.D., the lead author and associate professor of health management and policy in the College of Public Health and associate director for the Center on Aging, said that "[b]etween 2000 and 2010 the proportion of all professors 65 and older nearly doubled, and the aging professorate now outpaces all other white collar professions." Thus, "[t]he lack of attention being directed to the challenges and opportunities presented by the aging academic workforce is alarming."

According to the Executive Summary:

There was little correlation among programs and retirement pathway offerings. Institutions that rated highly on wellness programs or retirement counseling services did not always offer a variety of retirement pathways. Instead, most universities and colleges appeared to pursue a piecemeal approach toward accommodating and transitioning aging employees; their efforts more often were developed in response to an immediate demand rather than in pursuit of a strategic plan.

Among the report's recommendations for making more aging-friendly academic institutions are that (1) institutions should address attitudes about the aging workforce and identify offerings in wellness programming, counseling services, workplace accommodations and retirement pathways, and (2) focusing on the development of programs that promote workplace longevity and provide employees with information that aids their decision-making about retirement will go a long way toward maintaining healthy and engaged employees who pursue a more predictable retirement pathway.

Source: University of Iowa Iowa Now (March 21, 2012)

Canada: Human Rights Commission Warns Against Forced Retirements during Transition Period before Ban on Mandatory Retirement Takes Effect

The Canadian Human Rights Commission is cautioning employers on the rights of aging workers. The section of the Human Rights Law that permitted federally regulated employers to impose mandatory retirement in some circumstances was repealed in December 26, 2011, but a one-year transition period was included before it would take effect. The Commission is now telling employers that that delay is "not a license to force aging workers out the door."

According to David Langtry, Acting Chief Commissioner of the Canadian Human Rights Commission, "Forcing someone to retire because of their age clearly contradicts Parliament’s intent, even if a defense in law still appears to be available." The Commission does not have evidence that this is taking place, but the Commission believes it is prudent to caution any employer that might be considering such action to think again. Even before it was repealed, he Federal Court had ruled that that section of the law violated the Charter of Rights and Freedoms and that this breach is not a justifiable limitation of an individual’s right to equality.

For commentary on whether employers are focusing on, or thinking of acting on, this delay, see "Legal loophole allows ageism at work to go unpunished" and "Retirement 'loophole' overblown", both in the Vancouver Sun.

Source: Canadian Human Rights Commission News Release (March 26, 2012)

Book Reviews: "Age, Gender and Work: Small Information Technology Firms in the New Economy"

Kane X. Faucher in the Western News has reviewed The University of British Columbia Press's Age, Gender, and Work: Small Information Technology Firms in the New Economy edited by Julie Ann McMullin, and published in 2011. According to Faucher, this book is a culmination of the Workforce Aging in a New Economy research program (WANE), present findings after seven years of research related to the fact that "the acceleration on the 'information superhighway' will be spotted with accidents, of which we may count those who suffer age and gender discrimination in the IT workplace."

A full complement of case studies, statistics and detailed analysis shines an unflattering light on small IT firms in Canada, but one can hope that rigorous studies such as these may become a foundation for broad initiatives of awareness. With all the concern about obsolescence in the IT industry, it is the old attitudes and assumptions about age and gender that need to be upgraded.

An earlier review in Business New Technology stated that the "volume examines how women and older workers in small IT companies are disproportionately vulnerable to economic uncertainty within their industry," and that "the authors explore how gender and age affect work and workplace culture to produce a fresh contribution to the literature on inequality."

Sources: Western News "Read All Over reviews, March" (March 29, 2012); Business New Technology Review (February 12, 2012)

EEOC Publishes Final Regulations on What is a "Reasonable Factor Other than Age" under ADEA

The U.S. Equal Employment Opportunity Commission (EEOC) has amended its age discrimination regulations to clarify that the federal Age Discrimination in Employment Act (ADEA) prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on a reasonable factor other than age ("RFOA"), in particular to explain the meaning of RFOA in relation to Supreme Court decisions.

In the final regulations, the EEOC concludes that the individual challenging an employment practice as having an age-based adverse impact is responsible for isolating and identifying the specific employment practice responsible for the adverse impact. In turn, as explained in EEOC questions and answers about the regulations, an employer would be required to prove the RFOA defense only after an employee has identified a specific employment policy or practice, and established that the practice harmed older workers substantially more than younger workers.

The rule emphasizes the need for an individualized consideration of the facts and circumstances surrounding the particular situation. It includes the following list of considerations relevant to assessing reasonableness:

• The extent to which the factor is related to the employer’s stated business purpose;
• The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
• The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
• The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
• The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

Source: Equal Employment Opportunity Commission Press Release (March 29, 2012)

Flexibility Initiatives by Employers Can Benefit both Employers and Older Workers Research Finds

The Sloan Center on Aging & Work at Boston College has published the results of research finding that workplace flexibility initiatives, when properly matched to employee needs can provide strategic benefits to older workers and their employers. In "Flex Strategies to Attract, Engage & Retain Older Workers," the Center presents corporate case studies across a variety of industry sectors that demonstrate the value of workplace flexibility’s ability to recruit, retain, and engage older workers.

The most common strategies used by the three organizations (Central Baptist Hospital, Marriott International and MITRE Corporation) surveyed were: offering part-time positions (42%), hiring retirees as consultants or temporary workers (40%), and offering flexible work arrangements for older workers (36%). According to the Center, the best, and most promising, flexibility practices are those that address managers’ concerns about such things as trust, losing control and coaching older workers.

Before providing a series of recommendations, the report offered the following conclusions:

For older workers—indeed, for employees in all age groups—having access to flexibility is predictive of greater employee engagement, less stress related to perceptions of work overload, better physical and mental health, and greater satisfaction with work/family balance. However, for maximum impact, flexibility must be the right fit for each employee. To accomplish this for older workers, the employers featured in this report offer a variety of options to customize when and where work is accomplished and how careers are organized.

Source: The Sloan Center on Aging & Work at Boston College Publication News (March 28, 2012)

Czech Republic: Increasing Number of Pensioners Registered as Employed

According to an article by Laura Burgoine in The Prague Post, more pensioners in the Czech Republic are choosing to remain in the labor market. Specifically, data from Czech Statistical Office (ČSÚ) reveals that, in 2011, an "increase of 11,000 old-age pensioners was registered as employed last year, taking the number up to some 157,000, accounting for 7 percent of all those receiving state retirement benefits."

The main motivators behind the number of old-age pensioners in the work force growing 7% are social- and health-related as much as they are financial. Burgoine cites research suggesting a link between education and employment, with most of the employed pensioners being highly educated. She quotes Ondřej Nývlt from ČSÚ as saying: "A lot of the pensioners in the work force are doctors, lecturers and academics; people with high education seem to be more active."

One reason people with higher qualifications opt for returning to work is because they have spent a long time building a career, which they don't want to give up, Lucie Vidovićová, a sociologist from Masaryk University, said.

"Also, they are not tired from their work like those who have spent their lives doing physical labor," she said.

At the other end of the scale, the most common professions for older pensioners include working in agriculture, selling newspapers, stocking supermarket shelves and working as security guards, drivers, administrators, technical support and shop assistants.

Source: Prague Post "Older workers staying on the job" (March 28, 2012)

United Kingdom: Employers Not Taking Proactive Steps To Engage and Retain Older Workers

A report published by Acas finds that there is little evidence of employers in the United Kingdom taking proactive steps to engage and retain older workers. According to research conducted by Cranfield School of Management and Nottingham Business School, "The Employment Relations Challenges of an Ageing Workforce" concludes that "if the UK economy is to fully benefit from the skills and experience of its older workers, a larger proportion of organisations will need to adopt age management policies and practices which are effectively communicated to their workforces."

On a broader level the evidence suggests that despite anti-age discrimination legislation and the removal of age barriers in employment policies and practices, there continue to be stereotypical attitudes towards individuals based on age in the workplace, including the view that a person’s performance decreases from age 50 onwards, and that many employers generalise from what was actually limited experience of older workers with older workers seen as lacking technological skills and being less adaptable to change than younger workers.

Interestingly, the authors also note that there is some evidence that anti-discrimination legislation is "having a deadening effect on employers’ proactivity in addressing age related issues on the grounds that to do so would be discriminatory as it would introduce different treatment for different age groups."

Among the recommendations for age management policies, the report includes:

• embedding in the employment relationship a better understanding of how age is currently conceptualized in the world of work in order to maximize the organizational engagement and contribution of older workers;
• workforce training and other initiatives to change the organizational culture around stereotypical attitudes about both older and younger workers; and
• better targeted guidance and education which stresses the business benefits of innovative working practices, engagement and communication, rather than just focusing on compliance with the anti-age discrimination legislation.

Source: Acas News Release (March 28, 2012)

South Korea: Debate on Raising Retirement Age Continues with Generational Conflict at Issue

According to an article in the Korea Herald, social consensus around raising the retirement age seems to be still out of reach, even as major employers are filling jobs with older employees. Kim Kyung-ho writes that generational tensions are at issue, as some "express concerns that extending retirement age would lead to a further reduction in job opportunities for young people, whose jobless rate is hovering around 8%." In fact, the trilateral commission looking in to the retirement age issue has launched a separate subpanel on "co-existence between generations" and have tasked it with "drawing up methods to increase jobs in a way that avoids a zero sum game that forces a choice between jobs for the young and employment for the old."

In framing the debate, the article contrasts:

Many labor experts have argued that extending the retirement age has little impact on youth employment, saying concerns over intergenerational competition or conflict over jobs are exaggerated in most cases.

“On the level of an individual company, they may appear to be substituted for each other,” said Phang Ha-nam, a senior researcher at the Korea Labor Institute, a non-profit research organization in Seoul.

with a report released by the Samsung Economic Research Institute suggesting job opportunities for young people have been at least partly substituted by the elder generation’s extended employment:

A 1 percentage point increase in the employment rate of people in their 50s translated into a 0.5 percentage point decrease in that of 20-somethings between 2005 and 2010, according to the report.

Particularly from 2007-09 when the global financial crisis brewed and peaked, the rate declined by 0.84 percent for the young but rose by 1 percent for the old.

“It would be desirable for jobs to increase at the same time for both the older and younger generations, but in reality that is not the case,” said Tae Won-you, a SERI research fellow.

Source: Korea Herald "Intergenerational tension over jobs" (March 27, 2012)

Canada: Delayed Retirements will Increase and Gradual Changes to Retirement Age Should Follow

According to a report issued the C.D. Howe Institute, over the next 20 years in Canada, there will be "a strong trend towards later retirement by babyboomers as a result of social and economic pressures, without any policy action by government to raise retirement levels." Specifically, “Later Retirement: The Win-Win Solution” estimates that future retirees are likely to work five additional years on average.

Peter Hicks a former federal Assistant Deputy Minister, the report's author, says that this additional work effort will have large, positive economic and fiscal effects, the author reports, reducing pressures on growth, government finances and pension funding. While Hicks says that there is no immediate crisis in public pensions to be addressed, a key reform will be to gradually increase the standard age of pension eligibility in order to bring it more in line with increases in longevity. "For example, it makes no sense to continue with a standard age of 65 for public pension eligibility when the average retirement age will soon be 68."

“The trend towards later retirement will significantly reduce, although not entirely offset, the much-discussed negative macro-economic and labour-market effects of population aging,” says Peter Hicks a former federal Assistant Deputy Minister. “This suggests that compensating policy reforms are still needed but can be less draconian than has often been thought to be necessary.”

The largest problem Hicks perceives may be among a "relatively small number" of people those who cannot work longer and who might be negatively affected by changes in pension eligibility age, but he believes even this can be ameliorated by gradual changes.

Source: C.D. Howe Institute Media Release (March 27, 2012)

Demographics of Aging Workforce as Indicator of Slower Future Growth, Deeper Recessions

According to two economists, James Stock and Mark Watson, in the future, U.S. growth will be slower, recessions will be deeper, and recoveries will be weaker because of demographics--in particular because of the plateau in the female labor force participation rate, and the aging of the U.S. workforce. In the draft of their conference paper for the Brookings Panel on Economic Activity--"Disentangling the Channels of the 2007-2009 Recession," they write:

The main conclusion from this demographic work is that, barring a new increase in female labor force participation or a significant increase in the growth rate of the population, these demographic factors point towards a further decline in trend growth of employment and hours in the coming decades. Applying this demographic view to recessions and recoveries suggests that the future recessions with historically typical cyclical behavior will have steeper declines and slower recoveries in output and employment.

Derek Thompson, writing for The Atlantic, says that another way of looking at what Stock and Watson found is that "As 80 million Boomers move into retirement, a smaller share of our population will be working ... and a rising share will be seeking increasingly expensive medical attention from the workforce that is left over. That adds up to a less dynamic economy." Thompson does hope "that the transition to a service economy will allow older people to work longer than they have in the past," and also notes that there are low-hanging solutions to creating more working Americans, including changes in immigration policy, housing policy, and reducing costs of education and medicine.

Source: The Atlantic "Gray Nation: The Very Real Economic Dangers of an Aging America" (March 26, 2012)